Strategy for the Telecommunications, Media and Technology industries

Where was Strategy at Google I/O and Apple WWDC?

Much has been written about the outcomes from both Google I/O and Apple WWDC, the companies’ respective developer conferences held in the last 2 weeks. There were many interesting developments including Google Now updates (on tap!), the release of new android software ‘M’, Google’s ‘Moonshots‘ or from Apple new insight into iOS9, OSX, updates to the watch experience and the launch of Apple’s music streaming service – Apple Music.

Through all the displays of gadgetry and keynote pageantry I watched both events with an eye on the strategy of these two companies and here are my thoughts:

Mission: Just do everything for everyone… that’s what big companies do

In terms of mission as a foundation for strategy, Google’s developer conference was a tale of 2 halves. The first half could be neatly described as ‘Google serving everyone with everything’. Google showcased a full-sized buffet of features and programs that seemed to exist simply because a company of Google’s size ought to do them: Android Pay, an operating system for the home, an IOT language etc. None of these appeared to have a unifying vision – just a sense that Google ought to do them because they’re a big company that ought to do big things.

The second half was redeeming. Sundar Pichai’s demo of Google’s natural language processing power brought it right back to Google’s mission: ‘Organize the World’s Information and Make it Universally Accessible and Useful‘. The ability to search photos (tree frogs!) through speech recognition is exactly what Google was created to do and its business model of Cloud + Software + Advertising and software capabilities helps them to continue to do this very well.

Apple WWDC: Sell integrated hardware and software… and other things like music

For Apple the event was the opposite way around to I/O. The first 90 minutes were very tight around Apple’s purpose of ‘making the personal computer ever more personal‘. Displays of the improved search on iOS9 and OSX, and Ipad and Watch updates speak to the sleek integration between software and hardware that Apple brings vs Google’s more horizontal approach as a Cloud/Software company. This reinforces Tim Cook’s and Steve Job’s mantra which Cook spoke to at the Goldman Sachs Technology and Internet Conference earlier this year:

We are the most focused company that I know of, or have read of, or have any knowledge of. We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number, so that we can put enormous energy behind the ones we do choose, so that we can deliver the best products in the world…

The second half then focused on Apple Music. Despite dominating music for a relatively brief period of time through iTunes and the iPod, Apple’s launch of a new music streaming service is about 5 years too late and runs somewhat counter to its mission (perhaps a reason it is 5 years late). And like Google, this feels like a case of offering everything to everyone because they can. There is streaming music and curated lists and BeatsOne radio and Connect and all with no cogent thread to tie them together beyond the assumption that Apple must do a music service because that is what they do…and that’s what big companies do.

Strategic choices: The difference between Cloud+Software and Hardware

Starting a business today… would you rather be a cloud+software company or a hardware company? There would be arguments for both (e.g. differentiated hardware is still very profitable) but increasingly the lure of being a hardware focused organisation like Apple (monetising primarily through sales of devices) is less attractive. As hardware interfaces become a smaller part of user engagement and as intelligence becomes more important it is cloud+software that brings new possibilities not hardware – and Google I/O did a very good job at highlighting this (see Now on Tap).

Apple’s core problem space is shrinking

Apple has some tough choices to make in the coming years like – where next to apply its core capability of making integrated hardware and software? The watch was a further personalisation and it has been rumoured that the car may be next. The caution here though is where is the car going in the future? – Driver-less, not user-owned, not personal. The problem set by which Apple can apply its how to win (integrated software/hardware) aligned to its unifying ambition is diminishing it would seem.

Photos are the new lock-in factor – Google knows it

Both Google I/O and Apple WWDC highlighted the shift in platform ‘lock in’ that has taken place in the last few years. With the advent of music streaming services music is longer the ‘lock-in’ factor it once was (e.g. purchased songs/albums) although Apple perhaps still sees some promise in Apple Music. Google’s advanced search with Google Photos has unveiled a new reason to use Google/Android products. As photos are large in size and organised according to Google’s software it will be increasingly hard for users of Google Photos to switch photo service providers (many Terra-Bytes to move, customised photo information). Apple will need to choose whether to strengthen its iCloud photo capability/software to compete – possibly a better choice than Apple Music.

The privacy dilemma for Apple

From comments made in the lead up to WWDC, Apple is clearly teetering on making a distinct choice on privacy for users of its hardware – in stark contrast to Google and others. At EPIC’s Champions of Freedom event, Tim Cook was honored for his commitment to privacy. His speech included quotes like this one:

Like many of you, we at Apple reject the idea that our customers should have to make tradeoffs between privacy and security…You might like these so-called free services, but we don’t think they’re worth having your email, your search history and now even your family photos data mined and sold off…

Cook’s speech is getting a lot of praise around the web. Whilst Apple’s current business model does not survive on collecting, mining and ‘selling’ user data, it relies on user data to refine software/hardware to make it more personal and offer cloud services. Apple needs to choose which side of the privacy fence it sits on. A sufficiently narrow view of privacy could see hardware like the Watch (which requires the cloud) becoming a very poor second cousin to Android’s predictive Google Now features as showcased at I/O.